Houthis seize strategic Red Sea islands as analysts warn of impending oil crunch

AI desk brief

Houthis’ seizure of Greater and Lesser Hanish in the Red Sea and continued pressure around the Bab al-Mandab have intensified fears of a broader oil supply shock. Rystad said 2.6m-4m b/d had been moving through Saudi Arabia’s east-west pipeline and Yanbu since late August, with that volume now at risk of disappearing from the market if the outage persists.

Brent rose 1.17% to $106.92/bbl, while analysts warned the market may be losing the buffer that previously cushioned supply disruptions. Tim Waterer said any prolonged disruption could push prices higher, and Chevron’s Mike Wirth said it was now harder to see prices softening quickly over the next few months.